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Tuesday, April 29, 2014

A ‘Sweet Spot’ in tackling climate change?

Today (Monday April 28, 2014) Jeremy Oppenheim was in Toronto. Oppenheim is the director of the Global
Commission on the Economy and Climate (chaired
by former Mexican President Felipe Calderon, co-chairs include Lord Nicholas
Stern and the OECD Secretary-General). He was hosted by Corporate Knights’ Toby
Heaps for a 'high level' lunch which included some of the top brass of Toronto’s investment,
real estate, insurance and academic communities. And civil society, of course,
David Miller (ex-Major of Toronto and now Head of WWF Canada) was there, too.

It was, first off, a real
game changing experience to see a room of 30ish ‘climate activists’ in
pinstripes (or female equivalent) convening over antipasto e bistecca to
discuss the plight of the planet. Oppenheim's remarks were thought provoking as they
reflected the current gist among those leaders that care seriously about climate change.

Oppenheim started by
highlighting that the public debate has somewhat stalled as most of conversations on climate change evoke pretty unsexy, depressing and un-cool truths. Going
on and on about threats linked to climate change just makes you a boring party
pooper.

At least in person – he was
all but. Eloquently, engaging and thoughtfully he relayed his core points.
What struck me most is that amongst the experts, the entire debate
about ‘avoiding’ or ‘fighting’ climate change is yesterday’s news. Oppenheim stated clearly
that – in my words - we just have to suck it up that temperatures are about to rise by two degrees. The damage is done. Today’s debate is really about
how to avoid global warming to reach three or even four degrees. A sobering – and
somewhat chilling assessment.

Oppenheim – no less a McKinsey director on leave from their London offices – then pointed to the currently explored strategy - which
hopefully can become a game changer: highlight the 'positive' side of climate
change (in my words). Or to put it this way: adapting to climate change can already
make economic sense now! He ran through a couple of examples from many places
around the globe. Here is just one: Deforestation in the Brazilian Amazon
region has been identified as a great worry. What we see now though is that land
owners in the Amazon are increasingly sympathetic to restrictions on turning
rain forest into farm land: after all, the unlimited possibility of creating
new farmland through cutting the forest decreases the value of their property.
According to Oppenheim, those economic drivers are a huge force in favor of
climate friendly policies.

It is interesting to see
that a group of top business people is having this discussion. In the Canadian
context, many of these will be laughed out of their Golf Clubs or seven star
resorts in the Caribbean if they ever repeated to their buddies what they heard today.
Canada, Oppenheim intimated with the maximum level of British politeness, is a
real mess with regard to climate change action. So Oppenheim’s point was really
that we have to change the story, change the way we communicate about it.
Present it as a story of opportunity, rather than a story of threat. While Lord Stern’s report years ago was telling us ‘Pay a little now and you avoid being taken
to the cleaners by climate change tomorrow!’ Oppenheim’s new message is: ‘You
can actually make money on adapting to climate change NOW!’

I left the event with a
somewhat ambiguous feeling. I was uplifted to see key players in business –
from where most of the sources of carbon emissions are ultimately governed –
acutely aware of the problem. I also liked the pragmatic gist of Oppenheim’s
argument: We can use the current incentive structure in one of the most
powerful engines of capitalism to ‘move the needle’ (I have to watch my language…)
on pressing global issues. And - fair enough - there is some leeway.

At the same time, the by
now worn out quote from Albert Einstein kept creeping up on me on my way home: “We
cannot solve our problems with the same thinking we used when we created them.”
A focus on short term economic gains for individual actors or organizations got
us into this mess of climate change in the first place. And – we have to add –
has prevented any large-scale meaningful response to date. So finding that
‘sweet spot’ (a quote from Jeremy Oppenheim’s McKinsey Website) where business
interest and environmental needs converge may take us some way. But there can
be little doubt that this is not going to really change the bigger picture.

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Andrew Crane [L] and Dirk Matten [R]

Welcome to the Crane and Matten blog - for informed commentary and expert analysis on the everchanging world of corporate responsibility.

We are two business school professors best known for our books and research articles on business ethics and corporate citizenship. We wrote the Crane and Matten blog from 2008-2015, offering unique insight on a range of issues from across the globe.

Andrew Craneis Professor of Business and Society in the School of Management, University of Bath.

Dirk Matten is the Hewlett Packard Chair in Corporate Social Responsibility in the Schulich School of Business, York University.